Subsec. (d)(1)(A). Pub. L. 109–163, § 3507(a)(2)(D), (b)(3)(A), in introductory provisions, substituted “made by the Administrator” for “made by the Secretary of Transportation”, “unless the Administrator” for “unless the Secretary”, and “Administrator shall” for “Secretary shall”.

Subsec. (j)(1). Pub. L. 109–163, § 3507(a)(2)(F), substituted “Administrator shall promptly provide” for “Secretary shall promptly provide”, “Administrator of the potential use” for “Secretary of the potential use”, and “authority of the Administrator to disapprove a loan” for “authority of the Secretary to disapprove a loan’.

Subsec. (m). Pub. L. 109–163, § 3507(b)(6), substituted “If the Secretary or Administrator has waived a requirement under subsection (d) of this section, the loan agreement shall include requirements for additional payments, collateral, or equity contributions to meet such waived requirement upon the occurrence of verifiable conditions indicating that the obligor’s financial condition enables the obligor to meet the waived requirement.” for “Provisions that the Secretary or Administrator shall include in loan agreements include requirements for additional collateral or greater equity contributions that are effective upon the occurrence of verifiable conditions relating to the obligors financial condition or the status of the vessel or shipyard project.”

Subsec. (d)(5). Pub. L. 108–136, § 3526(1), struck out par. (5) which read as follows: “The Secretary may obtain independent analysis of an application for a guarantee or commitment to guarantee under this subchapter.”

1993—Subsec. (a)(1). Pub. L. 103–160, § 1356(3)(A), amended provisions before proviso generally. Prior to amendment, such provisions read as follows: “financing, including reimbursement of an obligor for expenditures previously made for, construction, reconstruction, or reconditioning of a vessel or vessels owned by citizens of the United States which are designed principally for research, or for commercial use (A) in the coastwise or intercoastal trade; (B) on the Great Lakes, or on bays, sounds, rivers, harbors, or inland lakes of the United States; (C) in foreign trade as defined in section
1244 of this Appendix for purposes of subchapter V of this chapter;; or (D) as an ocean thermal energy conversion facility or plantship; or (E) with respect to floating drydocks, in the construction, reconstruction, reconditioning, or repair of vessels:”.

Subsec. (b)(2). Pub. L. 103–160, § 1356(3)(B), substituted “subject to the provisions of subsection (c)(1) of this section and subsection (i) of this section,” for “subject to the provisions of paragraph (1) of subsection (c) of this section,” and inserted before semicolon at end “: Provided further, That in the case of an eligible export vessel, such obligations may be in an aggregate principal amount which does not exceed 871/2 of the actual cost or depreciated actual cost of the eligible export vessel”.

Subsec. (b)(6). Pub. L. 103–160, § 1356(3)(C), inserted “or, in the case of an eligible export vessel, of the appropriate national flag authorities under a treaty, convention, or other international agreement to which the United States is a party” after “United States Coast Guard”.

1986—Subsec. (b)(2). Pub. L. 99–509 substituted “That in the case of a fishing vessel or fishery facility, the obligation shall be in an aggregate principal amount equal to 80 percent of the actual cost or depreciated actual cost of the fishing vessel or fishery facility, except that no debt may be placed under this proviso through the Federal Financing Bank” for “That in the case of any vessel to be used in the fishing trade or industry, such obligations may be in an aggregate principal amount which does not exceed 871/2 per centum of the actual cost or depreciated actual cost of the vessel”.

1984—Subsec. (a)(3). Pub. L. 98–595, § 1(2), substituted provisions relating to financing of purchase, reconstruction or reconditioning of designated vessels or fishery facilities for former provisions relating to financing of vessels acquired by the Federal Ship Financing Fund pursuant to section
1275 of this Appendix.

Subsec. (a)(7). Pub. L. 98–595, § 1(5), struck out par. (7) which related to the financing of the purchase of fishing vessels or fishery facilities sold at foreclosure instituted by the Secretary.

Subsec. (d)(1). Pub. L. 98–595, § 1(6), substituted provisions establishing economical soundness as a requirement for a commitment by the Secretary and detailing factors for evaluation for former provisions which established the general criteria of economical soundness and wise use of fishery resources.

Subsec. (e). Pub. L. 98–595, § 1(12), inserted “Such regulations shall provide a formula for determining the creditworthiness of obligors under which the most creditworthy obligors pay a fee computed on the lowest allowable percentage and the least creditworthy obligors pay a fee which may be computed on the highest allowable percentage (the range of creditworthiness to be based on obligors which have actually issued guaranteed obligations).”

1980—Subsec. (a). Pub. L. 96–561, § 220(3)(A)(vi), inserted provision after par. (7) that any obligation guaranteed under par. (6) be treated, for purposes of this subchapter, in the same manner and to the same extent as an obligation guaranteed under this subchapter which aids in the construction, reconstruction, reconditioning, or purchase of a vessel, except with respect to provisions of this subchapter that by their nature can only be applied to vessels.

Subsec. (b). Pub. L. 96–561, § 220(3)(B), inserted provision after par. (7) prohibiting the Secretary from establishing, as a condition of eligibility for guarantee, a minimum principal amount for an obligation covering the reconstruction or reconditioning of a fishing vessel or fishery facility, which reconstruction or reconditioning does not include the routine minor repair or maintenance of the vessel or facility.

Subsec. (b)(2). Pub. L. 96–320, § 202(c), inserted proviso that in the case of an ocean thermal energy conversion facility or plantship which is constructed without the aid of construction-differential subsidy, the obligations may be in an aggregate principal amount which does not exceed 871/2 percent of the actual cost or depreciated actual cost of the facility or plantship.

1978—Subsec. (b)(2). Pub. L. 95–257 inserted proviso relating to vessels to be used in the fishing trade or industry.

1972—Subsec. (a). Pub. L. 92–507 substituted provisions relating to the purposes for which guarantees may be made, for provisions relating to the eligibility of mortgages for insurance.

Subsec. (b). Pub. L. 92–507 substituted provisions relating to the eligibility requirements of obligations for guarantee, for provisions relating to the eligibility of loans for insurance.

Subsec. (c). Pub. L. 92–507 substituted provisions that security for guarantee may relate to more than one vessel, that security may consist of any combination of types of security, and that an obligation may have the latest maturity date permissible for any vessel which serves as security for the government guarantee of the related obligations, for provisions relating to the prior determination of the soundness of the property or project for mortgage or loan.

Subsec. (d). Pub. L. 92–507 incorporated provisions of former subsec. (c) into subsec. (d) and extended provisions of this subchapter to commercial fishing vessels. Provisions of former subsec. (d) were incorporated into subsec. (e).

Subsec. (e). Pub. L. 92–507 incorporated provisions of former subsec. (d) into subsec. (e) and substituted therein provisions authorizing the Secretary to fix a fee for the guarantee of obligations and providing separate formulae for delivered vessels and vessels under construction, for provisions authorizing the Secretary to fix a premium charge for the insurance of mortgages and loans and providing separate formulae for mortgages and loans by reference to section
1273 of this Appendix. Provisions of former subsec. (e) were incorporated into subsec. (f).

Subsec. (f). Pub. L. 92–507 incorporated provisions of former subsec. (e), relating to the collection of investigation fees from applicants for insurance into subsec. (f), and substituted therefor provisions relating to the collection of investigation fees from applicants for guarantee. Provisions of former subsec. (f) incorporated into subsec. (g).

Subsec. (b). Pub. L. 91–469, § 32, inserted in par. (2) “research, or for” before “commercial use”, substituted in par. (4) “not exceed” for “be less than”, and inserted in par. (4) restriction that advance and principal amount of other advances under insured loans outstanding at time of advance shall not exceed 871/2 per centum of actual cost of vessel where in the case of the approved vessel the minimum downpayment by the mortgagor required by section
1159 of this Appendix would be 121/2 per centum of cost of vessel.

1968—Subsec. (a)(5). Pub. L. 90–341 substituted provision that the maximum interest rates allowed on ship mortgages eligible for insurance coverage be at such rates on the outstanding principle obligation as determined by the Secretary of Commerce to be reasonable, taking into account the prevailing rates and the risks assumed by the Department of Commerce, for provision setting a maximum of 5 per centum per annum, or 6 per centum per annum when the Secretary determined that in certain areas or under special circumstances the mortgage or lending market demanded it.

1959—Subsec. (a)(2). Pub. L. 86–123, § 2, substituted “and which is, or in the case of a vessel to be reconstructed or reconditioned would have been, eligible for mortgage aid for construction” for “which is eligible for mortgage aid” in proviso.

Subsec. (d). Pub. L. 86–127, § 1(3), inserted “excluding the average amount (except interest) on deposit in an escrow fund created under section
1279a of this Appendix” in two places.

Subsec. (f). Pub. L. 86–123, § 1(3), substituted “sections
1101 to
1110” for “sections
1101 to
1109” of Act June 29, 1936, which, for purposes of codification, has been changed to “sections
1271 to
1279 of this Appendix”.

1954—Act Sept. 3, 1954, provided standards of eligibility for both mortgages and loans, set up restrictions, and provided for premium charges.

1953—Subsec. (a)(2). Act Aug. 15, 1953, § 2(1), inserted “or, in the case of vessels, constructed under subchapter V of this title, involved in an obligation in a principal amount which does not exceed 75 per centum of the cost of the vessel (exclusive of construction-differential subsidy and cost of national-defense features)”.

1950—Subsec. (a)(2), (7), (8). Act Sept. 28, 1950, inserted provisions concerning purchase of vessels for use on the Great Lakes pursuant to the Merchant Ship Sales Act of 1946.

1939—Subsec. (a)(8). Act Aug. 4, 1939, included mortgages to secure new loans or advances made to aid financing of vessels designed for use in the fishing trade or industry.

Effective Date of 1996 Amendment

Section
101
(a) [title II, § 211(b)] of div. A of Pub. L. 104–208 provided that the amendment made by that section is effective 15 days after Oct. 11, 1996.

Effective Date of 1960 Amendment

Amendment by Pub. L. 86–518 applicable only to vessels delivered by the shipbuilder on or after Jan. 1, 1946, and with respect to such vessels shall become effective on Jan. 1, 1960, and with respect to vessels delivered by the shipbuilder before Jan. 1, 1946, the provisions of this chapter existing immediately before June 12, 1960, shall continue in effect, see section 8(a) of Pub. L. 86–518, set out as a note under section
1125 of this Appendix.

Transfer of Functions

For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relating thereto, to the Department of Homeland Security, and for treatment of related references, see sections
468(b),
551(d),
552(d), and
557 of Title
6, Domestic Security, and the Department of Homeland Security Reorganization Plan of November 25, 2002, as modified, set out as a note under section
542 of Title
6.

Prohibition of New Loans for Construction of Fishing Vessels Under Certain Conditions

“(1) Until October 1, 2001, no new loans may be guaranteed by the Federal Government for the construction of new fishing vessels if the construction will result in an increased harvesting capacity within the United States exclusive economic zone.

“(2) No loans may be provided or guaranteed by the Federal Government for the construction or rebuilding of a vessel intended for use as a fishing vessel (as defined in section
2101 of title
46, United States Code), if such vessel will be greater than 165 feet in registered length, of more than 750 gross registered tons (as measured under chapter
145 of title
46) or 1,900 gross registered tons [(]as measured under chapter 143 of that title), or have an engine or engines capable of producing a total of more than 3,000 shaft horsepower, after such construction or rebuilding is completed. This prohibition shall not apply to vessels to be used in the menhaden fishery or in tuna purse seine fisheries outside the exclusive economic zone of the United States or the area of the South Pacific Regional Fisheries Treaty.”

[Pub. L. 107–206, title I, § 1103, Aug. 2, 2002, 116 Stat. 884, which directed the amendment of title II of division C of Public Law 105–277 by substituting “of more than 750 gross registered tons (as measured under chapter
145 of title
46) or 1,900 gross registered tons as measured under chapter 143 of that title)” for “of more than 750 gross registered tons”, was executed to section 302(b) of Pub. L. 104–297, set out above, as amended by section 212 of Pub. L. 105–277, to reflect the probable intent of Congress.]

Revision of Contracts, Commitments To Insure Mortgages, Mortgages, and Mortgage Insurance Contracts Entered Into Prior to June 12, 1960

For provisions authorizing revision, see section 8(c) of Pub. L. 86–518, set out as a note under section
1125 of this Appendix.

Commercial Expectancy or Period of Depreciation of Tankers and Other Liquid Bulk Carriers

Nothing in any amendment made by Pub. L. 86–518 to operate or be interpreted to change from 20 to 25 years the provisions of this chapter relating to the commercial expectancy or period of depreciation of any tanker or other liquid bulk carrier, see section 9 of Pub. L. 86–518, set out as a note under section
1125 of this Appendix.

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